ARCHIVED — Society of Composers, Authors and Music Publishers of Canada (SOCAN)

On June 22, 2001, the Government of Canada issued the following three documents and launched a process of consultation and reform designed to modernize Canadian copyright legislation:

1. A Framework for Copyright Reform;
   
2. Consultation Paper on Digital Copyright Issues; and
   
3. Consultation Paper on The Application of The Copyright Act’s Compulsory Retransmission Licence to The Internet.

The Society of Composers, Authors and Music Publishers of Canada/Société canadienne des auteurs, compositeurs et éditeurs de musique ("SOCAN") welcomes this opportunity to participate in the Government of Canada’s copyright reform consultation process.

Before commenting on these three documents, we will briefly describe who we are, and what we do.

The Society of Composers, Authors and Music Publishers of Canada/Société canadienne des auteurs, compositeurs et éditeurs de musique ("SOCAN") is Canada’s sole musical works performing rights society.

SOCAN is a not-for-profit Canadian organization that represents composers, lyricists, songwriters, and publishers of musical works from Canada and around the world.

SOCAN's copyright reform concerns relate to:

SOCAN’s performing rights in musical works are separate and distinct from other rights, including reproduction rights (i.e., mechanical rights and synchronization rights) or Bill C–32's neighbouring rights.

SOCAN’s origins flow from the collective administration of performing rights.

The concept of collective administration of performing rights was developed in its present form over a century ago. Canada is a party to the Berne Convention for the Protection of Literary and Artistic Works, which was originally adopted in 1886 to protect the rights of authors over their literary and artistic works.

A current description of the raison d'être of the collective administration of performing rights is as follows:

The Parliament of Canada has enacted legislation affecting the collective administration of performing rights for seven decades, since Canada's Copyright Act was amended in 1931.

SOCAN was formed in 1990 when the following two performing rights societies merged to form a single society:

As Canada’s only performing rights society that administers musical works, we speak with a strong, unified voice.

Copyright is comprised of several different and distinct rights, which have evolved over time in response to technological and other changes. Originally, copyright focused on the exclusive right of authors to produce, reproduce (i.e., copy), or publish their works.

Performing rights developed because it was recognized that authors should also have the exclusive right to permit public performances (i.e., music accompanying visual and/or acoustic representations) of their works. This right becomes even more important in the digital market place where rights can be exploited (i.e., performed or communicated) in a myriad of ways to innumerable destinations involving a multiplicity of transactions.

The Canadian Copyright Act creates several distinct and separate rights that belong to anyone who creates music or lyrics (a musical work), including:

SOCAN is not involved in reproduction rights (i.e., mechanical rights or synchronization rights). We are only involved in performing rights, which belong to anyone who creates a musical work.

Performing rights are the most important rights for composers, lyricists, and songwriters because performing rights royalties are often the primary source of income for the individuals we represent.

The collection and distribution of performing rights royalties create significant challenges. These challenges are constantly changing as the means of distributing public performances of musical works expands due to the evolving technologies of fibre optic cable, satellite broadcasting, computer software, digital recording, the Internet, etc.

Even if these technologies were not evolving, it would be impossible for every individual Canadian composer or lyricist to keep track of the millions of music users and public performances and broadcasts of their works across Canada and abroad.

Likewise, music users would find it impossible or very costly to obtain the permission of each of the hundreds of thousands of copyright owners from Canada and around the world each time they wished to perform or authorize the performance of music.

SOCAN meets these technological and logistical challenges by serving as a clearing house that licenses music users and seeks fair and equitable compensation to music creators.

For example, in 2000, SOCAN collected $174 million in domestic licence fees and royalties from foreign affiliated societies.

On behalf of our members, SOCAN performs the following three functions:

Our primary objective is to ensure that our members are fully compensated when their music is communicated to the public by telecommunication (e.g., broadcast) or performed in public.

To fulfill our objective, we perform two principal functions:

Section 67 of the Copyright Act stipulates that SOCAN must file proposed royalty tariffs with the Copyright Board. There are over 20 different tariffs that apply to a variety of venues and types of performance including, radio and television stations, pay, specialty and other cable television services, background music, Karaoke Bars, live entertainment in bars, clubs hotels, etc.

SOCAN's proposed tariffs are published in the Canada Gazette and prospective users have the right to file objections with the Copyright Board. The Copyright Board may then hold public hearings, which allow the users to express their views before the Board renders its royalty decision.

Music has always been an international enterprise. One of the fundamental principles of the 1886 Berne Convention for the Protection of Literary and Artistic Works is national treatment, which requires signatories to treat foreign authors and composers no less favourably than they treat their own authors and composers.

There are performing rights societies similar to SOCAN in every developed country and in the majority of developing countries around the world.

A network of reciprocal bilateral agreements between these societies and a series of international copyright treaties enable the musical works of SOCAN members to be protected almost everywhere in the world.

Since 1993, SOCAN writers have earned more money outside Canada than they earn domestically and these foreign revenues have continued to increase. In 2000, SOCAN's revenue from foreign societies amounted to a record $29.7 million.

Unlike some other copyright organizations which only represent corporations, SOCAN is a performing rights society that represents and directly pays individual Canadian creators of original musical works and their publishers.

Our Statement of Principles includes a strong mandate to protect, preserve, and promote the rights of music creators under the guidance of our composer, lyricist, songwriter, and publisher members who are elected to SOCAN’s Board of Directors.

Our 18 Board members broadly represent the regions of Canada, the French and English languages, as well as popular, film and television, and concert musical styles.

Ultimately, music users determine the international flow of royalties. SOCAN recognizes that the amount of performing rights royalties that remain in Canada is directly related to the amount of Canadian music that is performed here at home. That is why we are dedicated to encouraging the use of more Canadian music in Canada.

To promote Canadian music, SOCAN holds many seminars and workshops and sponsors annual awards presentations for English and French language Canadian composers, lyricists and music publishers.

We also publish monthly magazines Words and Music and Paroles et musique. These publications encourage the performance of Canadian music and are distributed around the world.

In addition, the SOCAN Foundation, an associate organization, gives grants to various bodies that help to stimulate the performance of Canadian musical works at home and abroad.

Another way we promote the interests of Canadian composers, lyricists, and songwriters is through our efforts to improve copyright laws, both national and international.

SOCAN therefore welcomes this opportunity to provide our preliminary views on copyright reform in Canada.

The copyright reform process is described in the document dated June 22, 2001, entitled A Framework for Copyright Reform (the "Framework"). As noted in the Backgrounder on Copyright Reform:

Issues regarding the first two points are addressed in the discussion of the two consultation papers that follows. Before addressing these two consultation papers, SOCAN wishes to comment on the third point – the Section 92 Statutory Review of the Copyright Act created by Bill C-32 in 1997.

Section 92 of the Copyright Act states:

As page 4 of the Framework notes, Section 92 requires the Minister of Industry to table the Report by September 1, 2002.

The wording of Section 92 makes it clear that Parliament intended that the Minister’s Report and the Parliamentary Committee’s review be very broad in scope.

First, the Minister’s Report is not confined to the provisions of the Copyright Act enacted by Bill C-32. Instead, the entire Copyright Act’s provisions and operation falls within the scope of the Minister’s Report.

Second, Section 92 envisions that the Minister’s Report include recommendations for legislative amendments. Again, these legislative amendments are not confined to the provisions of the Copyright Act enacted by Bill C-32. Instead, Section 92 envisions legislative amendments to any part of the Copyright Act.

Third, under Section 92, the scope of the Parliamentary Committee review is not confined to the Minister’s Report. In addition, the Committee shall "undertake a comprehensive review of the provisions and operation" of the entire Copyright Act. The Committee is then required to report back to Parliament by September 1, 2003, or later, if so authorized.

In sum, the scope of the Section 92 Statutory Review is comprehensive and may result in significant legislative amendments to the Copyright Act within the current government mandate.

SOCAN therefore looks forward to hearing how we may provide further input to the Minister’s Report that must be developed and finalized within the next 12 months.

In the meantime, in our 28-page submission dated January 23, 2001, SOCAN provided to Industry Canada and the Department of Canadian Heritage (the "Departments") our preliminary views on copyright reform – including, term of protection, clarifications to the Copyright Board’s role and jurisdiction, and certain exemptions and presumptions. We hereby request that these views be considered in the Section 92 Statutory Review process.

Under the Introduction heading, the Consultation Paper on Digital Copyright Issues (the "Digital Paper") states:

In response to the question of whether the approaches suggested in the Digital Paper contribute to a copyright framework which promotes Canadian public policy objectives, we have provided our preliminary views regarding each suggested approach below.

In general, while SOCAN agrees that changes to the policy framework for copyright should not operate to hinder the development of the full potential of the Internet and other digital platforms, those changes must not operate at the expense of the creators and owners of the content, which is the raison d’

etre of the Internet.

There is a considerable amount of information and other intellectual property that can be made available to the public – without making unreasonable demands on the owners of copyrights who simply desire a reasonable degree of protection for their creations, and without making unreasonable demands on the users who are in the business of making those copyrights available to the public.

Framework rules under which the Internet Service Provider ("ISP") sector can thrive must be clear and simple to adhere to, but they must respect the rights of Canadian copyright owners. This principle is increasingly important as technology develops which will ensure that territorial rights can be respected – so that Canadian copyright owners will be compensated appropriately when their works are exploited within Canada, or abroad.

Under the Proposals heading, the Digital Paper has raised several questions regarding the following four key issues:

1. Making Available;
   
2. Legal Protection of Technological Measures;
   
3. Legal Protection of Rights Management Information; and
   
4. Liability of Network Intermediaries.

First, pages 18-19 of the Digital Paper recognize that different rights holders may have different interests because the Making Available Right ("MAR") is discussed from the perspective of:

1. Authors and Their Successors; and
2. Performers and Sound Recording Makers

The Digital Paper illustrates that it is important to examine the impact of legislative amendments on the three key rights holders – i.e., SOCAN’s creators’ of musical works and their publishers, performers, and sound recording makers:

Different rights holders should not be granted rights in a way that an unreasonable relationship or hierarchy of rights is created between those rights holders. For example, downstream record companies should not be given rights that place them in a preferable position to that of the upstream creators of the musical works that are recorded.

As a representative of authors’ rights, SOCAN believes that amendments to the Copyright Act should not prejudice the rights of our members. To ensure our members’ rights are not prejudiced, the following amendments are required.

First, Parliament has recognized the principle of non-derogation in Section 90 of the Copyright Act and SOCAN submits that Section 90 should be amended to include any new rights, including the MAR.

Second, pages 18-19 of the Digital Paper also recognize there is a risk that judicial interpretation could adversely affect the MAR as it applies to SOCAN’s members:

SOCAN cannot again run the risk of being exposed to the costly litigation and legislative delays associated with the Bill C-88 exercise. We therefore support the position of the Intellectual Property Institute of Canada that the Copyright Act should be amended to ensure that an exclusive right of "making available" will be part of copyright for all rights owners.

To ensure there is no uncertainty regarding an author’s MAR, the Copyright Act’s definition of "communicate the work to the public by telecommunication" should specify that it has always included and continues to include the exclusive right of "making available". In addition, the MAR should cover both the act of "uploading" as well as the act of "downloading".

Exceptions mean that some uses of copyrighted works are permitted without the rights holder’s consent or without the payment of royalties.

The Digital Paper proposal discusses a MAR, which would include an exclusive right to authorize the use of a musical work, and the exclusive right to remuneration. However, SOCAN’s members’ authorization and remuneration rights are subject to the exception created by the Copyright Act’s compulsory licensing provisions. If SOCAN’s members’ do not have these exclusive rights, and performers and sound recording makers do, there may not be a "level playing field".

Rather than consider additional limitations or exceptions, consideration should therefore be given to reviewing the Copyright Act’s compulsory licensing regime for performing rights societies.

In the alternative, no additional exceptions should be created beyond those that are currently in place, unless they are required to create a "level playing field" for all copyright owners.

It is unclear to SOCAN at this time as to how the enforcement of the reproduction right does not provide an adequate remedy to owners of sound recordings that would allow them to restrain the unlawful online use of their copyrights.

In addition, the owners of copyrights in sound recordings possess a right of equitable remuneration for the use of their musical works in an online and other environments. However, these rights owners believe that this new right is required.

SOCAN does not dispute these rights owners’ claim for this new right. However, owners of the underlying copyrights in recordings (i.e., authors and their designates) must be provided equal rights to ensure that a "level playing field" exists in the marketplace. Please see the required amendments discussed above.

It is safe to assume that rapidly developing technology will provide the necessary safeguards for copyright owners to protect their works in an online environment. As a result, the United States, the European Communities, and other countries have already taken steps to protect technological measures.

This being the case, and despite the fact that there is little information regarding the impact of such technological measures, SOCAN believes that it is incumbent on the Government to put in place legislative provisions that make it unlawful to interfere with those safeguards.

Consideration should be given to ensuring that devices, systems or processes that permit the exploitation of intellectual property without the permission of the copyright owner are restricted in use to ensure there is no detrimental interference with the rights of the copyright owner. If these restrictions also have the effect of controlling the use of works that are not protected by copyright (i.e., works that are in the public domain), this will not affect the ability of others who wish to provide access to these works from doing so.

The other alternative – which SOCAN does not advocate – is to create an exception to the sanction against those that defeat or assist in defeating technological measures that protect copyright. This narrow exception would make it lawful to defeat or assist in defeating a technological measure to gain access to a work that is not protected by copyright. In SOCAN’s submission, this would be a dangerous solution which would upset the balance of rights between creators and users, and result in "throwing the baby out with the bathwater" in an effort to allow unrestricted access to intellectual property.

SOCAN has every confidence that non-copyright protected material will continue to be accessible in an online environment no differently than it currently is accessed in a non-online environment.

As discussed above, the only exceptions that should be provided are exceptions that are similar to those that currently exist, and those that allow copyright owners to reasonably protect their works from exploitation without compensation.

Yes. If a party were to develop a technological measure that would result in the disclosure of information that is protected as confidential or proprietary information, or is otherwise protected under the laws of Canada (personal information), that person should be subject to the provisions of the applicable law, such as the Personal Information Protection and Electronic Documents Act (Bill C-6), in addition to the provisions in the Copyright Act.

Information relating to the creator (author) and title of a work never changes, and should be protected under the Copyright Act. While the publisher of a work may change, it is not difficult to determine a current owner based on the title and writer information and normal "chain of title" information that is contained in databases or is publicly known. Only copyright owners, or their authorized agents, should be permitted to change this information.

A provision could be added to the legislation to clarify that the enforceability of terms and conditions included in rights management information continues to be subject to Canadian contract law and other applicable legislation.

In cases involving "dual purpose technology", the law should apply one or both of the sanctions.

To illustrate, if someone were to remove a stop sign from a street corner, they might be responsible in law for public mischief or damaging public property, or both. If that action also resulted in a traffic accident, they might also be held to be responsible for that as well.

Yes. As discussed above, if a party were to develop a technological measure that would result in the disclosure of information that is protected as confidential or proprietary information, or is otherwise protected under the laws of Canada (personal information), that person should be subject to the provisions of the applicable law, such as the Personal Information Protection and Electronic Documents Act (Bill C-6), in addition to the provisions in the Copyright Act.

No. SOCAN currently has an application before the Federal Court of Appeal for judicial review of a Decision of the Copyright Board that addresses the question of ISP liability and is seeking judicial interpretation of many of these issues. (Society of Composer, Authors and Music Publishers of Canada and Canadian Association of Internet Providers et al Court file No A-764-99).

Specifically, it is unclear at this time as to the applicability and meaning of section 2.4 of the Copyright Act. In particular, it is unclear as to whether ISPs and to what extent ISPs – apart from the exception in section 2.4(1)(b) – are liable.

There is a need for greater certainty for all copyright owners and users (i.e., websites) so that these parties know what they can and cannot do.

One of SOCAN’s concerns is to ensure that the ISP that provides its service to its customers is responsible for the communication of copyrights to those customers. ISPs who are part of a "backbone" are – in most cases – mere intermediaries and as such, would not be responsible for the communication. As SOCAN stated in its Memorandum of Fact and Law in the application referred to above:

If a "notice and takedown" system were created in Canada, care must be taken not to repeat the mistakes and create the complexity that has arisen in the United States as a result of the Digital Millennium Copyright Act ("DMCA").

Furthermore, notice and takedown must also be extended to permit copyright owners to notify an ISP – if technologically possible – and require it to "block" transmissions into Canada that would infringe the rights of Canadian copyright owners, and not merely require it to "take down" material that the ISP itself maintains on its server.

ISP liability in cross-border transmissions of musical works from foreign websites to end-users in Canada is important to all copyright owners. The Departments should therefore reject the Copyright Board’s Tariff 22 interpretation because it creates the following adverse consequences:

1. Canadian rights holders will not be paid remuneration for the exploitation of their works in Canada;
   
2. Canadian participation in the development of comprehensive global copyright licensing will be impeded;
   
3. the licensing of copyright in musical works in all countries connected to the Internet will be distorted; and
   
4. content providers will be motivated to establish their websites on, or relocate their websites to, servers in jurisdictions outside Canada to avoid having to pay Canadian rights holders, thereby reducing the revenue of the Canadian rights holders.

Canadian based ISPs should be liable to pay Canadian copyright royalties because they have a real and substantial link that extends from the location where the work being communicated originates, to the Canadian subscriber who compensates that ISP for the right to receive that communication.

SOCAN rejects the claims of those (e.g., iCraveTV.com and JumpTV.com) who argue that local and distant broadcast signals may be lawfully retransmitted over the Internet, if the person responsible for the retransmission pays the appropriate royalty under the "retransmission regime" defined by section 31 of the Copyright Act. However, recent litigation and controversy demonstrate that SOCAN’s interpretation is not without challenge.

Several copyright owners have suggested amendments to make it clear that local and distant broadcast signals cannot be lawfully retransmitted over the Internet under the Copyright Act’s Section 31 "retransmission regime". To ensure there is no more uncertainty and litigation on this important issue, SOCAN would support such amendments and ask that we continue to be part of the consultation process.

SOCAN welcomes this opportunity to share our preliminary views on the critical issue of copyright reform.

We look forward to meeting with the Departments to further discuss our views and to continuing to play an active role in the consultation process.